1. How and why I joined the Debt For Climate movement
- Antoine Kopij
- May 14
- 6 min read
Updated: May 15
Spring 2022. One of these online climate activist meetings that became the new normal during the Covid lockdown. I found the announcement of a Debt For Climate talk on another Signal group chat. A new campaign aiming at the cancellation of public debt in countries of the Global South, in order to prevent the extraction of fossil fuels and protect the environment. It was ticking all the right boxes. On the call, faces of climate activists from all over the globe were stacked up in the virtual lobby, looking excited or severe, smiling or busy.
The meeting started with a long round of self-introductions, where everyone got the chance to say who they were and why they were there. The ritual would stick for the subsequent meetings, as it helped individuals dispersed in the world to feel each other’s struggles. Looking into their eyes and hearing their own words made me realize how much debt and climate change affect everyone. At different degrees, naturally. Armed evictions, civil wars for natural resources and double digits interest rates are the lot of the Global South, while the Global North merely mourns the climate and the myth of eternal growth. But seeing all of them together gave me the old goose-bumps. Debt For Climate coalesces climate activists, social stakeholders and labor unions from both sides of the globe.
I have believed for a long time that unifying the struggles of the social and climate movements is the only way to propose a meaningful alternative to the dystopian battle royale that seems to serve as a storyline for our lives on this planet. I can’t see a path without considering both the climate emergency and the necessity to counterbalance the concentration of economic power in the hands of a self-serving minority. A similar reasoning led to the emergence of Debt For Climate, a movement created by activists of the Global South and founded on the understanding of the interdependence between the external debt of developing countries and the exploitation of their natural resources, particularly in connection to climate change.
It was the same mindset which led me to investigate the effect of tax havens in BlackRock’s forest-risk investments. It didn’t take long before discussions inside Debt for Climate stumbled over BlackRock and the corruption facilitated by tax havens, so I expanded my initial research to seek answers to the question of the impact of BlackRock and tax havens on debt and extractivism.
As it turns out, BlackRock, the largest financial company in the known universe and largest private creditor of low to middle income countries, has a heavy hand in the negotiations between highly indebted countries and their creditors. BlackRock de facto represents the interest of all private bondholders, who would see their precious revenue impacted by any sort of debt rescheduling, not to mention the plain and simple debt cancellation that is claimed by Debt for Climate.
Sources:
To clarify the obstacles facing debt cancellation and systemic change towards sustainable finance, I also need to talk about tax havens.
Tax havens, concentrated between $21 and $32 trillion of the world’s wealth in 2010, according to the Tax Justice Network, which corresponded to 10,5% and 16% of the world’s wealth, as estimated by Credit Suisse.
But tax havens are more than just state-size cash safes for the uber-wealthy.
They also play a significant role in the extortion of Global South economies by offering impunity and secrecy to the actors who drain the income of natural resources (see the work of Leonce Ndikumana), and to the financiers who refuse to participate in negotiations to cancel, reduce or reschedule the debt (Jubilee Debt, Eurodad).
In this blog series, I will summarize the research I found to explain how these interactions play out, and conclude with ideas that have been proposed to address these problems. But first let’s talk more about Debt for Climate and why their proposition is convincing activists from both hemispheres.
The basic tenets of Debt for Climate’s demands are quite clear. The most indebted countries, usually located in the Global South, have seen their situation deteriorate drastically during the covid pandemic. They are under increasing pressure to exploit fossil fuels and other natural resources to pay off their external debt, while austerity measures imposed on them by the International Monetary Fund and the World Bank are increasing inequalities and further deteriorating the living conditions of women and vulnerable groups. Governments are given the choice of refusing to pay, which means risking to lose access to external borrowing to finance their budgets, or paying off their debt by sacrificing the welfare of their population, exploiting fossil fuels and damaging their environmental heritage. The only plausible outcome of the status quo is for developing economies to borrow more, in order to pay off the current debt. As a result of the intensification of resource extraction, pollution will increase as well as catastrophic events due to environmental destruction. Economically speaking, the debt of the countries most impacted by climate change means a continued descent of the concerned populations down a poverty trap.
The solution proposed by Debt for Climate is radical and yet it is rational. Canceling debt to keep fossil fuels in the ground and preserve environmental resources, while allowing some breathing room to the most indebted countries. As destructive climate events increase in the South, debt relief in compensation for the pollution due to developed nations has become a talking point on the United Nations stage, as in the case of the floods in Pakistan.
Truly, the idea that the poorest nations need to scrub their pockets and ravage their land to send bags of cash to the wealthiest on the planet is preposterous in itself. From an ethical point of view, there shouldn’t be a need for invoking climate change as a reason for debt cancellation. But the climate argument goes beyond altruism. Self-preservation commands that the Global North does everything it can to decrease carbon emissions and preserve the natural carbon sinks and biodiversity harbors of the Global South, like the Amazon or the peatlands of Congo.
The debt crisis is no longer the famine and misery of the South that the North ponders about sanctimoniously, sending its financial institutions to the rescue to provide more loans to corrupt governments, more corporations to extract value from the soil and kick the population around, while giving lessons on democracy and the free market. By connecting debt cancellation to carbon emissions and environmental preservation, Debt for Climate reveals the systemic nature of the debt crisis as the existential problem of the custody of natural resources, access to water, food and energy, and the regulation of the financial markets that control them.
It is no coincidence that Debt For Climate was launched from the Global South. The fundamental proposition of the campaign is to swap the public debt of the South for the climate Debt of the North. The idea of climate debt emerged from the fact that 85% of carbon emissions that are causing climate change are coming from the G8, the wealthiest countries of the North, while developing countries in the South are the most impacted by the destructions caused by climate change. Without surprise, the governments of affluent countries that bear the largest responsibility in climate change are not pleased with the prospect of compensating impecunious nations for the ecological ruin that resulted from development and mass consumption.
To militants from the Global South, however, the matter is crystal clear. Former colonial empires that strived on slave trade from the sixteenth to the nineteenth century have become the technological giants which have been impacting the Earth’s climate since the start of the industrial revolution. Stories of development and progress ring hollow when your birthplace is torn apart by armed militias, flooded by toxic chemicals or burnt to the ground to give way to agribusiness.
As a militant from the Global North, sharing a virtual space with militants from the Global South brought about empathy, and the immediate awareness that only a worldwide coalition transcending historical divide has the capacity to balance the power of a centralized financial sector, in order to protect the planet and the interest of the many.
Read more about Debt For Climate, or in the Guardian.
This article is the first in a series: Sink logic: how BlackRock and tax havens worsen the climate and debt crisis
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